The National Association of REALTORS® (NAR), joined by several other large corporate brokerages, is asking the judge in one of the largest commission lawsuits to pause all proceedings pending an appeal in the Burnett case, in which a jury found in favor of plaintiffs and levied $1.8 billion in damages against NAR and two other defendants.
In a filing right before the new year, NAR requested that Judge Stephen R. Bough (who also presided over the Burnett trial) issue a stay in Gibson et al v. National Association of REALTORS et al, a class-action suit which NAR argued is functionally identical to Burnett.
“If successful, NAR’s appeal (in Burnett)…will result in a binding appellate decision that eliminates this case entirely or, at a minimum, significantly impacts the scope of discovery,” NAR lawyers wrote.
It is unclear whether this request marks a shift in legal strategy by NAR. Since the Burnett verdict last October, dozens of other similar class-action suits have been filed against the REALTOR® advocacy organization. So far, Gibson is the only case in which NAR has explicitly requested a delay based on the Burnett appeal.
Gibson was also the first suit to be filed following the Burnett verdict—within hours, in fact, and by the same attorneys who successfully argued that case.
In the request for a stay, NAR lawyers point out that the Gibson suit often uses “identical language” to Burnett, but also argue that the claims and legal issues are substantively the same, filed by recent homesellers and relying on the same foundational claims—that sellers were forced to pay inflated commissions due to NAR rules that required “cooperative compensation” for buyer agents.
Allowing Gibson to go forward could also result in relitigating complex legal questions, and would benefit both sides in terms of conserving time and resources, NAR continued.
In their own filing, lawyers for the plaintiffs argued that a pending appeal doesn’t merit the “extraordinary” measure of a total pause in the proceedings. They pointed out that other copycat cases would continue to go forward even if a stay was issued in Gibson, meaning NAR and the other defendants would see little benefit even as the Gibson case stalled.
As NAR fights on multiple fronts, the request for a stay in Gibson also revealed some of the future legal strategies the organization plans to pursue. Specifically, NAR said their Burnett appeal will focus on whether plaintiffs in Burnett had legal standing to sue at all as “indirect purchasers” of services, and also question the legal analysis used to examine antitrust issues in the case.
“These issues are directly implicated by the Gibson Complaint,” NAR wrote, adding that “directly relevant guidance” from the appeals court would be “forthcoming.”
In their response, plaintiffs claimed that NAR undermined the “indirect purchaser” argument years ago when seeking a dismissal of a different lawsuit filed by homebuyers (Gibson was filed by sellers).
In that case, NAR lawyers argued that sellers were more directly connected to the alleged antitrust violation, calling them “proper plaintiffs” for that conspiracy allegation.
That petition was successful, with the case dismissed and the judge agreeing that the seller “properly deemed to be the direct purchaser.”
On a more practical level, NAR claimed that going forward with discovery would put a “lopsided” burden on the defendants with “significant time and expense” needed compared to the plaintiffs, who have “little discovery to give.”
“(A) delay is necessary to ensure fair adjudication of the action and will not prevent
Plaintiffs from pursuing their claims in a timely manner after the Burnett post-trial motions and/or appeal are ruled on,” NAR’s lawyers wrote.
